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tv   Closing Bell With Maria Bartiromo  CNBC  May 1, 2012 4:00pm-5:00pm EDT

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it has been tiring. and i think that's going to continue. >> peter, love reading his blog. thank you for joining us today. we're coming off well off the highs. dow finishing at 50 points. stick around for a complete recap of the day on wall street as the second hour gets under way right now. >> he was loud. welcome to the "closing bell." i'm michelle caruso-cabrera. here's what we're following at the close. dow at the highest level in four years. we've seen late-day selling pressure in the last few minutes. coming up, should you ignore the sell many may and go away strategy this year? plus, cbs is just moments away from reported earnings. coming up, we'll tune into the media industry. find best bets in that space. we're awaiting on chesapeake earnings and announced they are
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taking the chairman title away from controversial ceo aubrey. kate kelly will have the details when the numbers come out from chesapeake. the dow jones industrial average higher by 67 points. 13,280. >> we tried out the old sell in may and go away. >> we're off of our highs, yes. and i would note that the nasdaq dipped as apple ended in negative territory. apple has been down nine of the last ten days. the ism numbers were better than expected. new orders were good for manufacturing, employment was strong. that's good for -- potentially good for the nonfarm payroll reports. transports were strong throughout the day.
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even though energy prices were higher. >> that's right. the dollar went up, commodities went up. that's a growth economy kind of scenario. that's certainly very good. it's certainly not qe 3. >> this is a market that wants to go higher when they get a report that suggests that the growth rate is going to continue to grow. >> that's right. it's positive for earnings implications and the jobs report. the way the components were put up today. materials like u.s. steel. while the market was fine at 3:00, a lot of the tech group, like the nasdaq 100 kind of drooped as we went into the close there. i was disappointed to see the russell 2000 didn't hold up really well. the small cap index ended flat to long. >> we didn't have participation to speak of on the european markets because they were closed for the mayday holidays. >> no. >> the continental markets were closed and they often influence
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our markets, especially around midday. >> and the chinese market was closed and they had a very important manufacturing components higher than expected. earnings are coming in well. the soft landing in china is still fairly in tact. europe is definitely the wild card right now. >> and you wait for the ism services numbers. >> that's right. >> that's the next leg. >> right. and that's 70% of the economy. if that number comes in stronger, and we're still expecting somewhere around 55, still expecting growth, that comes in notably stronger than expected. >> i want to highlight once again, apple appears to be mortal after all, huh? >> nine out of the last ten days are strong. volume has dropped off significantly since the earnings report. bob pisani, we'll see you later. >> is there more to come? on the floor of the new york stock exchange, gentlemen, good to see you. alan, what are you keeping your eye on?
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what do you make of the day's fade in the trading session? >> not really a whole lot. my focus is on the dollar. as i tell my daughter, i'm watching you. if we can break below 78.50, that's halfway to the rally that we saw when we had that crisis around the world. we're seeing that unwinding that will take that money out and put it back into the stock market. i think that's very bullish and commodities right now are 16% below where they were last year. that could be very much positive, including gold. we can see pop up here and see gold pushed above 1800 and light on fire once again. >> gordon, you're not paying attention to the dollar. you're paying attention to vehicle sales, correct? >> yeah. we'll be looking at the vehicle sales and payroll numbers late they are week. the question is, exactly what is -- where are we at in terms of the paradigm. in other words, it seems like a bernanke put keeps getting higher and higher and traders seem to feel comfortable buying
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into this market, which has been okay. if we start to see bad numbers, though, that might indicate stimulus or that may also be good. in this case, bad might be good for the market. >> are you one of these guys that say if the employment number on friday is ugly in main straight is not going to like it but wall street will like it? >> right. they are buying the dips and then looking for reasons to get involved either way here. the market is strong. we have a lot of reasons to believe it's going to continue the trebd. >> peter, what are you watching in the oil markets? >> the oil market got helped like the equity from the ism that pushed us through technical numbers. the oil market for the month of april has been locked in between $1.01 and $1.10. we remain in that range. a couple of big issues coming up in the oil markets. may 17th, they are going to turn around the pipeline that will
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run from curbing down to the gulf coast. that's going to be very bullish. additionally, we have the iran meetings coming up and that's may 23rd. a couple of big issues in the domestic oil market that has done much better in the month of april than it had done prior to that. we've seen bullish spread activity. >> guys, good to see you. thank you very much. alan, gordon, and peter. this year has been anything but doom's day for the bulls. at least so far. nasdaq and s&p up double digit. dow up 9% at the four-year average hitting that high into today's session. >> the rally has been felt by robust earnings. if you're investing for the long term, is now the time to start taking profits? some choppiness in the markets over the next few months.
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ceo and cig. the s&p 500 will end the year at 14.50. i like that. dan, let's start there. why? >> well, i think that what you're saying, michelle, the fundamentals have stayed surprisingly strong and very solid. it's riding on the backs of earnings. we're going to continue to see moderate gdp growth and the first quarter at 7% run rate up in earnings. that's the positive news and that's the tail wind that we have. i do admit that from a volatility standpoint, we're seeing cross currents primarily on a valuation, up 30% from the low in the first week of october and probably more important we're up three full multiple points and peaking at 13, 7, 13,8 is where we see resistance. we could see at a trading range near term but we'll get the earnings support and the final
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element is from investors. people want to buy into this market and -- >> we'll get support from that. >> joe quinnlan, no disrespect, but i know what you're saying, we're only as good as our later report. yesterday we're ringing our hands over spain's economy and today we're cheering an ism manufacturing report and they have different market responses there. >> yeah. you know, bill, it would be nice to call it a month. the first day of the month. but there's -- we still have to deal with spain. we still have to deal with the southern part of europe. you know, the good news is china and the united states are carrying the global economy. i'm looking around 3.5 to 4% growth. the big issue is as we get into the fall, the campaign, the focus is going to be on the united states and i think you're going to see a lot of headwinds and noise, chatter, and not much action coming out of d.c.
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>> you take some profits, you make sure you're in the quality asset classes, dividend payers. i'll be buying energy and agricultural commodities. if it's not part of your portfolio, it doesn't matter what is going to happen. per capita incomes are rising. take some time to put good asset qualities in you're portfolio. >> sectors or stocks? >> i would agree with joe with regard to the energy side. you're in a situation where you're going to see more drilling in the gulf of mexico and internationally and with the drillers and oil support companies and best in schlumberger and that brings it down to a 12 p.e. it's very, very strong and you see significant growth there. health care space has largely been ignored.
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we're going to see people getting more comfortable with obamacare and we're going to see more application. >> dan, thank you. good to see you guys. let's get to kate kelly for what has to be news on the most controversial stocks. chesapeake earnings, kate kelly has the latest numbers. >> expectations were higher and earnings are 18 cents per share. so a miss on both fronts. there are management comments by aubrey mcclendon. he does not talk about what is going on with his two roles and the fact that he will step down as chairman as soon as they find a replacement for him. we're pouring through the results. a disappointing quarter and i'll be back to you as i get more. >> did the company at all
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address the trading that mr. mcclendon was doing? did it have a material impact in. >> you mean the source of controversy? >> right. >> no. as far as i can tell, there's no comment from him or this particular release. they are trying to branch into the oil business in a very dramatic way this year. >> let's bring people up to date. aubrey mcclendon was pushed out as chairman. you said there was something notice noticeable in there, correct? >> correct. they basically said that we are pleased that chesapeake has taken our suggestions and we're
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glad that aubrey knows that as well as separation and ceo. i called southeastern and they've declined to comment beyond what is in that press release but it's very clear that there were some tough behind the scenes discussions with them and i know other shareholders were supportive of the company as it was but clearly there's been drama in oklahoma city. >> indeed. and the stock trading lower. >> that's right. it's clearly a disappointing quarter. natural gas, you know, at $2 or less clearly doesn't help them. so that may explain some of it. but, you know, they also disappointed even with that expectation baked in. >> kate kelly, thanks. as always. president obama made a surprise trip to afghanistan on this, the one-year anniversary of osama bin laden. mr. obama will meet with president karzai to sign a strategic partnership agreement which will be a road map for u.s. afghan relations over the
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next decade. mr. obama will address u.s. troops and the nations in a speech set to begin at 7:30 p.m. eastern time. gm and ford reported declines of 5% and 8.2% respectively. and news corp. chairman rupert murdoch is not fit to run the company the statement was unjustified and highly partisan. should you buy into media stocks ahead of all of the presidential election? which names look like they are
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the best bets? we'll have answers in a moment. plus, it's her first day as a cnbc contributor. carly fiorina makes the case why cutting corporate taxes is essential to noneconomic growth here in the united states. do you think lower corporate tax rates will help spur the economy and job creation? tweet your answers to @cnbcclosingbell. we'll share some of your responses later in the show. the most spectacular experiences are happening here. imax now showing on the big board. or creates another laptop bag
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i'm bertha coombs. cbs reports a record $3.9 billion with advertising up 54 cents versus expectations and confident that they will have a healthy upfront market season. take a look at herbalife, shares dropping today. this afternoon the company responding to what happened. the company says the fact that
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recognized short seller david einhorn put pressure on the stock. these are issues that the company says have been thoroughly addressed, something that happens with people who usually are new to the industry and, michelle, they say this is a buying opportunity and they have about $428 million in repurchasing authorization. >> he's new to the industry. >> i love that. they are being gentle about that, aren't they? >> he just doesn't understand the model. >> i love that. let's face it. if anybody else posed this question, raised this issue, i don't think the market would have paid attention, right? >> no. >> it's david einhorn raising his hand about an earnings conference call. >> and the first to raise a flag at lehman brothers. he's gotten pretty big calls pretty big right. >> but it was an amazing response immediately, you know,
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down 10%. we saw a stock holt intraday and another 10%. he's just raising questions about how they report it. >> and when erases questions, the markets -- >> everybody listens. >> thanks, bertha. the media center is front and center. you just heard cbs talk about their numbers. time-warner and comcast and then viacom will report results on thursday. news corp., as the aim is at james murdoch. owning all of these stocks through its various funds. >> larry, let me start with you. they say rupert murdoch is not fit to run a media business. do you think he is? >> we're investors in the stock
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and since this hacking scandal has broken out, the stock has gone up and i think the market has it right here. the message is very simple. six times cash flow. rupert's acquisition activity has been a consolation prize that the company has been very aggressively buying its stock. it has enormous potential to do more of it. it is buying it at six times cash flow. a 16% return with negative 6% cost of debt. i think from the post of stock business. >> martin, we heard big numbers from cbs. that stock is higher. do you like that stock and what are the expectations this week? >> as you look at the group, i like cbs and time warner, the best out of the media group for
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fundamental reasons. and autos are 10 to 15% of cbs's advertising. the ratings are still the best. all ratings are soft. i'll put it in a big picture perspective. it's flowing right through the advertising. >> larry, you saw the numbers. do you expect to see that from the rest of the media numbers when they come out? >> i think cbs is probably going to be the best of the class. time-warner has the problems of comparing against very difficult film earnings and here i think the outlook is very good for all of these companies because they are just generating mountains of free cash flow and they are all using it in a very, very responsible manner. cbs right at the head of the class on that as well. >> okay. >> and the absence of bad deals
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has really helped this industry and also -- >> larry, i'm sorry. we have breaking news. we have to cut you off. so sorry about that. martin and larry, thank you so much. >> a lot of news coming here after the bell. let's go to bertha coombs on drug news. what is going on? >> we're watching a small biotech firm here, they have been developing a drug along with pfizer in order to treat gout disease. it's an enzyme disease that causes build-up in the kidney. it's a very difficult disease to treat. the fda is approving a new orphan drug to treat this disease that they have developed and the stock is trading at a new 52-week high after hours on that move. >> bertha, thank you very much. for profit education stocks have not exactly gotten a passing grade from investors. they have been getting a failed
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grade. >> are they going to continue to get schooled or is there opportunity to buy this stock on the cheap? before we get to that, courtney reagan is going to set up to round-up today after hours action. courtney? >> one travel website is seeing shares soar. i'll round that up after we return to the "closing bell." tdd# 1-800-345-2550 account service fees. tdd# 1-800-345-2550 and the most dreaded fees of all, hidden fees. tdd# 1-800-345-2550 at charles schwab, you won't pay fees on top of fees. tdd# 1-800-345-2550 no monthly account service fees. tdd# 1-800-345-2550 no hidden fees. tdd# 1-800-345-2550 and we rebate every atm fee. tdd# 1-800-345-2550 so talk to chuck tdd# 1-800-345-2550 because when it comes to talking, there is no fee. in every way, shape, and form. it's my dream vehicle. on a day to day basis, i am not using gas. my round trip is approximately 40 miles to work.
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welcome back. cbs and the after market hours, after market movers. that's what it says over your shoulder, courtney. >> exactly. shares of online travel websites. look at this chart. flying high after hours. adding to the already all-time highs of the company. beating the street on both the top and bottom lines. going long after hours. we're up 20% now. chesapeake energy remains in the hot seat as kate kelly just told you. disappointing first quarter earnings missing on both the top and bottom lines. we were down much sharper. now we're down just a share. shares of nutri system. the company reported a 16% share loss on lighter than expected revenue for the second quarter
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eps now, rubicon is a 32 million market cap maker. the company did report a 15% loss for the first quarter. that's worst than the guidance and lower than the street expected. >> michelle? >> thank you, courtney. carly fee yiorina will lay her strategies straight ahead. >> she agrees with somebody here. that would be you. >> yes. >> do you think lower corporate tax rates will help spur the economy and boost job creation? tweet your thoughts tto @cnb
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welcome back. bob pisani on the floor of the new york stock exchange. i love con-way. it's in the dow transports. they beat on the top and bottom line. no guidance, though. we'll get a conference later. broa broadcom, big, big chip company. they beat on the top line and beat on the bottom line. revenue guidance was in the middle of the expectations. 1.9 to two billion. i have a consensus here of 1.97 billion. guys, back to you. >> thank you very much the dow hit a four-year high. the stocks contributed to that, right? >> yes. there are a number of them that we've been looking at them in terms of the multihere high back
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to november 7, 2002, home debee back to highs of 2001. intel hitting a new high today. intel for a long time was the real wallflower dating back to march 2004. travelers also as well. it's hit a new high of 64.99 today. verizon, at&t as well rounding out the group there. and you can see merck and at&t, remember advise son, seven of them closing at multi-year highs helping us reach new highs on the dow. >> bertha, thank you very much. the u.s. has the highest corporate tax rate in the world at 39.2%. but due to the various loopholes and tax credits in our code and the write off capabilities, it
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has sparked a debate on the value of lowering marginal tax rates. >> do you think lower corporate tax rates will help boost? lower regulations, lower taxes across the board. spur growth and boost tax revenues. see hong kong as an example. >> i don't know what her twitter name is, but carly fiorina is joining us. thank you for joining us. >> thank you so much. >> i know thaw got into this issue with paul kruegman earlier
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this week. what cfo pays the marge nol rate any way? why would lowering the marginal rate help the economy? >> well, actually what i said to paul is what i say all the time. i would both lower the rate and close the loopholes. and the reason i would do that is because it's a small business that i'm worried about, not big business. bertha just went through a raft of big companies hitting multi year highs and that's fantastic. and the fact that our marginal tax rate is the highest in the world, we don't have a competitive tax structure. it's a huge problem. we have fewer starting than at any time in the last 48 years. i worry about the health of our economy, and there if you talk
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to small businesses what they will say is the tax code and regulatory structure is we have to lower the rates. >> you can say the same thing about the personal tax code, right? >> absolutely. >> you've got to hire somebody these days to do it. the buffett rule, how do you see the buffett rule? would it even affect warren buffett? >> i think it perhaps purposefully, unless you close the loopholes and exemptions, again, whether it's personal or business, lower all of the rates, close all of the loob holes and you will broaden the tax rates and help restore the entrepreneur yell foundation. >> you and michelle here
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obviously agree on all of those issues. i'm going to have to play dev devil's advocate here. if we don't solve that problem, we face the possibility of another downgrade of u.s. debt like we suffered last august it's one thing to start lowering the tax rate we have the structural problem and this problem that needs to be solved. can we solve that problem and lower taxes at the same time? >> well, only if you also close loopholes. in other words, it's critically important to lower the rates and broaden the base, raise revenue. the only way to do that is to close loopholes which, by the way, and beyond that we have to
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get beyond the business that is actually doing budget reform, entitlement reform n. addition to tax reform. so i would think of tax report as necessary but not sufficient to economic growth. senator tom coburn for year after year has put out a report on government waste and abuse. it's now up to $350 billion. nobody is even tackling it. of course we have to get about these very serious reforms but i would say this as well. we can do budget reform, entitlement reform and we must. they will be hugely difficult and important but none of that will create a job. the only thing that creates a job, the biggest thing that creates jobs are entrepreneurs and innovators and small business owners. >> and we are so glad to have you as a cnbc croontributor. thank you so much. >> thank you. education stocks have been taken to school by investors,
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whatever that means. >> that means to get beat up. >> taking to the woodshed. >> we'll help you study up and how to cash in on this very beaten down stock straight ahead. >> who won our pond battle? was it the bond bull? it was a treasury bull, believe it or not. paul schatz. >> one of the few. >> or bear sharon stark. tweet us your responses. [ male announcer ] this... is the at&t network. a living, breathing intelligence teaching data how to do more for business. [ beeping ] in here, data knows what to do. because the network finds it and tailors it across all the right points, automating all the right actions, to bring all the right results. [ whirring and beeping ] it's the at&t network -- doing more with data to help business do more for customers. ♪
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welcome back to the "closing bell." auto has indicated the april sales coming in at 14.4 million vehicles. that's an increase of 2.5% compared to april of last year. for comparison, 14.5 million vehicles roughly in line with estimates and same pace we saw in march and february. back to you, michelle. >> all right. thank you very much, phil. occupy wall street protesters staged a nationwide general strike in conjunction with mayday. and one of the main complaints of occupy activists is the
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growing cost of a college education. many schools are now engaged in a fierce battle to recruit students and convince them that perks are worth the skyrocketing tuition. to join the occupy wall street, there were arrests in oakland and new york city but starting tomorrow california state university students plan to launch a hunger strike unless fees are frozen. about to renovate the dorms and then there's the food. more than half a dozen dining hauls. and administrators say these investments are needed to recruit the best. >> when i went to choose
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colleges, i ate in all of the different cafeterias that they had. that was really important to me. i wanted to make sure that they had good food. >> we have steak night and sushi nights. it's like a vacation. >> they are trying to be kog na zant that it's a living environment and not just a dorm. >> not a fan of tots food. >> reporter: meanwhile -- i'm sorry. he has a job lined up because he's so good at analysis and that's why he has the job. unlike most schools, pomona and clairemont don't include loans in the student aid packages. >> holy smokes, absolutely gorgeous.
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>> i toured it thinking i'd go to school there some day. >> you would like that. i can tell. >> yes, i would so besides occupy wall street, the president called on congress to freeze interest rates for student loans and in an opp ed piece, a senior fellow at hoover said the nation's economic future lies with the education sector. with education front and center, is now a time to buy in or get out of the for-profit education companies publicly traded. break it down with paa research and the president of tetro capital. thank you for joining us. >> thank you for having me. >> brad, would you think a for-pro fit education company, there would be an incentive to provide a better education that you would get from a nonprofit organization. that's not the case, huh?
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>> well, what's happened over time is that in an effort to continue to grow, the law of large numbers is catching up with these companies. you're seeing a deterioration in program quality in a lot of schools and as a result outcomes have suffered precipitously. it's not showing up in their retail rates but if you look at lifetime default rates where these schools are many times 60 to 70%. we recognize that they address a demographic that is, in some cases, have been ignored by the traditional sector but not delivering on the mandate to deliver high quality outcomes. >> you also don't like the for-profit educations. why? >> i don't like their stocks. people can make a case for value and unfortunately, those earnings are trending lower and
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so i think that the p.e.s are going to get lower and look more attractive. these stocks are value traps until they get the structural problems taken care of just like our other guest has discussed before me. >> what has to happen, brad, to make them happen as a u.s. investment? >> well, one, we are moving into this for a very long time. improving the value for profit education is number one. number two, to improve relevance. providing degrees and outcomes in terms of job placement had a higher probability and i think those are jobs one and two.
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they are going to deliver programs that have relevance. programs like criminal justice, some of the i.t. programs, that is a tool of social oppression, not social mobility. >> you've got to deliver the goods, that's for sure. gentlemen, thank you for joining us. i will point out that it's tough to find a bull. i don't know if that's telling or not. >> so many government subsidies as well. if you need government subsidies to survive, many maybe you shouldn't be in business. awaiting the employment report on friday. there is a key important report tomorrow. we'll round up everything that could move the markets when the "closing bell" returns after this. use... that's a bunch of ground-up paper, lad! scotts ez seed absorbs and holds water better. it's guaranteed to grow grass anywhere, even if you miss a day of watering. [ scott ] seed your lawn. seed it!
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>> i'm julia boorstin. comcast and time-warner report earnings before the bell. we will be watching video subscriber numbers and seeing results. >> rick santelli. tune in for the april adp jobs report expectations. 170,000 jobs.
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then tune in for march factory orders down 1.6%. >> we are counting down to the jobs report. we are still on the session watch in europe with key manufacturing and employment data out of germany, france, and portugal. joining us now is the senior equity strategist for the advisers and jeff davis, chief investment officer. good to see you. it's god the adtrp numbers and how much do you expect to see ahead of the big friday jobs number? >> adp has a short-term effect and it's not all that well synched. people will be watching out for friday. the market may react for a half day. friday is the big day. >> friday. wait for that. do you believe that a lot of people say if that number is bad, it's good for the markets. >> unemployment numbers, that's what we are doing.
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we see a number out of adp that is 120 or something like that. that is not going to be good. the market is going to like that, believe it or not. >> maybe there is nor qe. you see the retreat in the marketss a reversal of fortune in europe. we will get indications on the state of europe's economy. the recession from key data out there tomorrow. what are you watching? >> we are trying to get to the debts of the recession and how deep this will go. any indication of the depth could derail the u.s. market as well as europe. >> how are you looking at the market ahead of the friday jobs report? >> feeling good actually. the u.s. is today's resilience that has been uplifting and there is a circle going on starting here in the u.s. they could nicely derail. we will see. >> we will have to watch when we look for the numbers.
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you are watching on the earnings fronts. mastercard and visa. >> the credit card companies are looking at volume. is the consumer out there? right now consumers have been spending and i don't think it's through the entire year. that's what people are watching for. >> good to see you. appreciate it. >> thanks. >> here's something else we are watching for. carlisle's ipo that debuts tomorrow. everybody wants to know how the firm will do. can they generate big game gains? the ipo joins us with details. if you invested in the previous firms, you didn't make big gains and of those private equity firms of the first crop of the first generation, carlisle is the last of that group. they haven't left investors wanting more. take a look at black stone.
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they are all down sharply and black stone and apollo having never reached the price. they are concerned with these types of businesses and for carlisle take a look at this figure. they are coming in at $864 million in 2011. that's more than double what it was in 2010 and in 2010 it was nearly double what it was the previous year. the number is calculated by looking at proceeds from selling and exiting investments. it can be highly volatile depending on the market for deals. inside that has been take place worldwide, investors are toying with guidance of $760 million for the figure. that's lower than last year, but a number that the company is touting as more consistent than the peers where the number is volatile. it looks like carlisle is trying to value the company as a value
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play compared to the peers. at the mid-point which is 23 to $25 per share. the market cap would be less than half of the closest competitor. the company is valuing very conservatively when you take a look at the figure and doing that on purpose. perhaps it will work. we will look when it prices and see how it trades on thursday when it opens. back to you. >> it will be exciting to watch. thank you. >> easy come, easy go. after hitting a four-year high, the dow paired its gains. >> still a-year high. it turned out to be a roller coaster right for stocks again after this. arrival. with hertz gold plus rewards, you skip the counters, the lines, and the paperwork. zap. it's our fastest and easiest way to get you into your car. it's just another way you'll be traveling at the speed of hertz. but when i was diagnosed with prostate cancer... i needed a coach. our doctor was great, but with so many tough decisions
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just note your mileage and zap ! you're outta there ! we'll e-mail your receipt in a flash, too. it's just another way you'll be traveling at the speed of hertz. >> before we go, let's talk treasuries. we are buying in or out of the treasury market. here's one that caught our attention clearly in support of the bond. bruce allen said why would anybody want to go into treasuries. that would be loony tunes. he was avoiding treasuries because 2% doesn't cut the mustard. >> doesn't match inflation.
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>> tough to retire on that income. reaching for yields on treasuries that are not risky enough. that's what the fed is doing. trying to push people into other asset classes. they want people to put their cash to work and not park it. it's not working right. there is a lot of cash out there. tweet us when you get a chance. a better than expected report from the ism. we still close at a 13,279. the nasdaq around a one-month high with a gain on the day. >> we will take it.
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